E-commerce growth and opportunities for gig work in KenyaWednesday September 07 2022
The gig economy has blossomed in the past decade, not only in Kenya, but on a much broader scale in Africa. We have witnessed more online marketplaces for short-term and freelance jobs developing rapidly. Analysts say that this is only the beginning for developing economies, as more apps and players enter the market.
A report by Visa (SSA), Kenya ranks third in total volume of e-commerce in 2019 and 2020, South Africa was first, Nigeria came second. According to the report, the most important e-commerce enablers are the ability to access financial services, digital payment channels and digital infrastructure.
As per the report, e-commerce sales are projected to grow to $7 trillion across the globe by 2024.
The gig economy’s growth is also being driven by a burgeoning youth population looking for work. Kenya is experiencing a “youth bulge,” with approximately 20.1 percent of its population between the ages of 15 and 24. This ratio of youth is above the world’s average of 16.2 percent and sub-Saharan Africa’s average of 19.7 percent.
The growth of the gig economy has also been aided by the pervasiveness of technology and the ubiquity of mobile phones in many markets across Africa.
With the overall unemployment rates standing at slightly more than 26.4 percent, and the Kenyan economy’s inability to provide employment opportunities, the gig economy is increasingly providing alternative economic opportunities.
Gig work is gradually changing access to jobs and work opportunities from informal to digital platforms hence offering new revenue streams, creating more stability and formalising work conditions.
Many platforms have seen the gap and are beginning operations in Kenya. This has allowed, especially the youth, to take up the opportunities.
But despite the rapid expansion of the gig economy, there has been limited research on the size and impact in low- and middle-income countries.
This lack of knowledge limits investment in the development and growth of the gig economy. It also reduces policymakers’ ability to understand the experiences of workers and employers, thereby presenting a challenge for the development of evidence-based policy responses.
Other limiting factors include the fact that corporate and SME usage of gig workers is nascent, as is the uptake of online professional services. This is especially true among corporations due to their misperception that these workers are of poor quality.
Online gig work is also limited to urban areas, despite the efforts of government and other developmental actors to introduce youth in rural areas to digital skills and employment. Poor network coverage or connectivity quality, little information, and low awareness limit penetration.
Furthermore, women face societal and occupational barriers that limit their participation in the gig economy. Social norms and occupational segregation — the tendency for women to be employed in some sectors and not others — have significantly limited women’s engagement in gig work.
Policymakers, investors, tech innovators, training institutions and development agencies will be critical to generating demand for gig services, building skills and unlocking policy barriers. Collaboration between tech platforms and trainers can enable gig workers to develop soft skills, like communication, pricing and marketing.
The writer is Public Affairs Lead, Sub-Saharan Africa, at Glovo